Partnership to Revitalize Air Cargo

By Patrick Burnson, Executive Editor
November 21, 2013 - SCMR Editorial

The International Air Transport Association (IATA) recently called on all participants in the air cargo value chain to work together towards the common goals of improved quality, increased efficiency through e-AWB and e-freight and more effective security. Combined, these measures will improve air cargo’s competitiveness in the face of stagnant demand growth and unfavorable market developments.

Air cargo is suffering from a prolonged slump that has seen falls in yields, revenues and market share. Since 2010 world trade has grown by 12% whereas air cargo demand growth has been basically flat with only a 2% increase. A divergent trend in passenger demand, with growth continuing in the historical 5-6% range, has complicated the situation. As airlines grow fleet capacity to meet rising passenger demand, capacity has been introduced into weak cargo markets, putting considerable downward pressure on yields. Cargo revenues in 2013 are expected to be $59 billion, some $8 billion below the 2011 peak.

“No business or business model survives over the long term without evolving. Air cargo is being buffeted by forces for change. These include changes in the economics of just-in-time manufacturing, longer delivery lead times, innovation by alternative modes of transport, and environmental pressures. In the face of these challenges, air cargo needs to work together as an industry to improve competitiveness and protect its value proposition,” said Tony Tyler, IATA’s Director General and CEO, speaking to the Air Freight Institute at the World Congress of the International Federation of Freight Forwarders Associations (FIATA), in Singapore.

“By working together we have made global air cargo safe, secure and reliable. So reliable, that it is often taken for granted. It is the unsung hero of the global economy—underpinning global supply chains and delivering products to markets. But if we are to return the business to growth, the industry must collectively embrace an agenda for enhanced quality, efficiency and security,” said Tyler.



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The Port of Oakland has undertaken a series of measures in recent years to attract more import volume.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico increased 8.2 percent from September 2013 to September 2014 at $102.2 billion.

NS said that the D&H lines it plans to acquire connect with the NS network at Sunbury, Pa. and Binghamton, N.Y. and give NS single-line routes from Chicago and the southeast U.S. to Albany, N.Y., which is in close proximity to NS’ Mechanicville, N.Y.-based intermodal terminal.

This follows a 1.6 cent decrease last week, which was preceded by a 5.4 gain the week before and stands as the first increase going back to the week of June 23, when the weekly average headed up 3.7 cents to $3.919 per gallon.

BNSF said that its 2015 capital expenditures will be allocated towards various areas of its business, including maintenance and expansion of the railroad to meet the expected demand for freight rail service, with 2015 representing the third straight year BNSF has invested a record annual capital expenditures investment.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.